Experts warn of ‘significant impact’ to retail and hospitality as total rateable values rise 19.2%

Businesses have warned that the business rates system is “spiralling into crisis” after changes confirmed in the Budget have left the hospitality sector and others facing significant bill hikes.

In the Autumn Budget, the government confirmed new multipliers and the loss of rates relief for the retail, hospitality and leisure sector, followed by the post-Budget publication of the draft rating list for the April 2026 revaluations.

The fallout from the changes has prompted experts to warn of a “significant impact” to the economy, with Colliers’ head of business rates John Webber calling it a “dismal day for UK plc and the high street”.

Overall, the revaluation will see the rateable values (RVs) of the 2.13 million properties in the local rating list in England and Wales increase by 19.2%, with cumulative RVs rising from £70.78bn to £84.4bn.

In response to the changes, Heart of London Business Alliance (HOLBA) called an emergency meeting of the UK’s major business bodies, warning the system was “spiralling into crisis”.

HOLBA chief executive Ros Morgan said:

“Businesses of every size and every sector are facing rates hikes that bear no relation to economic reality. A system designed for the 1990s cannot be relied upon to fund public services in 2025 and beyond.

“This is now a whole-economy crisis and the government must act before more businesses are forced to close.”

UKHospitality chief Kate Nicholls has led concerns about the potential impact on hospitality, saying that Labour’s plan to level the playing field between the high street and online retailers “is quickly unravelling and will deliver the exact opposite”. She slammed the decision not to provide greater relief to the sector, and said pubs were now set to see bills increase by thousands of pounds and hotels by tens of thousands.

Analysis from UKHospitality shows that even with the reduced multiplier and transitional relief, the average pub’s business rates will rise £1,400, or 15%, next year. By 2028–29, the average pub’s business rates will have risen 77% and an average hotel’s by 115%.

Whitbread, one of the UK’s largest hotel groups, has written to Labour to issue a warning on the London Stock Exchange this week – stating that it plans to make £60m in cuts to its cost base from 2024 to 2026 if it cannot reverse the reforms.

Dominic Paul, chief executive of the Premier Inn owner, expressed “extreme disappointment” in the Budget, saying it would slow its programme to upgrade the wider hospitality industry.

Following the draft rating list for the 2026 revaluation, Webber said: “Hotels have generally lost out for the revaluation, with RVs going up by about 76% across the country. This has resulted in some startling rise, particularly in the major cities. We are also seeing significant increases across the board in rates payable.”

He also dubbed industrial and logistics and prime offices as among the biggest “revaluation losers”, with RVs set to rise 21.1% and 14.4% respectively.